London open: Fresh M&A and weaker pound push Footsie higher
Traders are pushing UK stocks higher on the back of fresh mergers and acquisitions news at the start of what is scheduled to be an exceedingly busy week on every front, geopolitical, macroeconomic and corporate.
As of 0845 BST, the FTSE-100 was adding 0.81% to 7,610.07, lifted in part by renewed weakness in Sterling.
Dominating the headlines was the new government's promise to accelerate preparations for no-deal Brexit, leading analysts and traders to caution that renewed weakness in Sterling might be just around the corner.
In response, the pound was 0.27% weaker against the single currency at 1.1098 and by 0.36% to 1.2340 versus the US dollar.
To take note of, during the previous session the S&P 500 had notched up a fresh record high at 3,025.68.
"The pound could well come under further pressure this week, ahead of the latest Bank of England rate decision and inflation report," said Michael Hewson, chief market analyst at CMC Markets UK.
"[...] The ramping up of “no deal” rhetoric and preparations over the weekend by the new Prime Minister and his cabinet, is unlikely to help sentiment and likely to reinforce concerns that the UK is on course to leave the EU without a deal at the end of October."
Against that backdrop, financial markets were digesting the latest news out around the ongoing US-China stand-off on trade.
On Sunday, state-owned Chinse broadcaster, Xinhua, said the country had bought millions of tonnes of US soybeans and that its companies would continue to buy other agricultural commodities.
The move was portrayed by the People’s Daily come Monday as a "concrete" and "goodwill" step, but in parallel Chinese officials were blaming America for playing a hand in the Hong Kong protests and said they had found evidence of further illegal actions by US parcel delivery company FedEx as part of its ongoing investigation into the mistaken rerouting of Huawei Technologies packages sent to the US.
US and Chinese trade officials were set to take up trade talks again the next day.
Consumer credit and mortgage lending data for June were set for release at 0930 BST.
Later in the week, decisions on official interest rates were scheduled in the US, UK and Japan, followed by July non-farm payrolls data in the States, on Friday.
M&A in focus
Just Eat and Takeway.com have reached a preliminary agreement on the key terms for merging the two food delivery giants. There was no guarantee that a transaction would take place, with the two sides still working to hammer out the remaining details, after which their respective boards and shareholders would need to approve any combination, with both companies reserving the right to walk away. The deal valued Just Eat shares at 731.0p each, for a 15% premium versus the previous session's closing price, but as of 0811 BST the stock had run up by 20.61% to 766.60p.
London Stock Exchange Group confirmed on Monday it was in talks to buy financial data and trading platform provider Refinitiv in a deal that could be valued at $27bn. A Blackstone Group-led consortium bought a majority 55% stake in Refinitiv from information publisher Thomson Reuters last year in a deal last year that valued the business at $20bn. The exchange said it would issue shares as part of the transaction with Refinitiv holders potentially getting a stake of 37%, LSE said in a statement. Thomson Reuters said over the weekend it expects to hold round 15% if the deal went through.
Lloyds of London insurer Hiscox reported interim profits at the upper end of its guidance range, with a 4.8% investment return offsetting higher claims volume. Pre-tax profits came in at $168m, up from $162.7m. The company earlier this month forecast first-half pre-tax profits of $150m - $170m (£119m - £135m). It added that the impact of events such as typhoon Jebi in Japan and hurricane Michael in Florida would impact reserve strengthening needed for those catastrophes of around $40m.
GlaxoSmithKline (GSK) said on Monday that its ViiV Healthcare business has submitted a regulatory application to the European Medicines Agency for its HIV-prevention drug cabotegravir to be used alongside rilpivirine as the first ever monthly, injectable treatment for HIV.
Cranswick said on Monday that first quarter trading was encouraging and in line with expectations as revenues were boosted by increased Chinese demand, while the business also confirmed a new acquisition. The UK food producer reported that its overall revenue in the three months ended 30 June was 1.5% ahead of strong comparatives in the same period last year, with the strong demand from China coming after the widespread outbreak of African Swine Fever in the region.
Specialist media group Future acquired US-based digital media publisher SmartBrief on Monday for an initial sum of $45m. Future's initial payment will include a cash consideration of $32.2m, funded from its existing debt facilities, with a further $12.8m to be satisfied through the issue of 1.02m new ordinary shares. The FTSE 250 resident noted the acquisition also included a deferred consideration, based on certain financial targets, subject to a cap of $20m.
Market Movers
FTSE 100 (UKX) 7,606.06 0.76%
FTSE 250 (MCX) 19,920.29 0.31%
techMARK (TASX) 3,892.23 1.05%
FTSE 100 - Risers
Just Eat (JE.) 790.00p 24.29%
London Stock Exchange Group (LSE) 6,484.00p 14.32%
Centrica (CNA) 90.10p 2.99%
Ocado Group (OCDO) 1,276.00p 2.90%
Vodafone Group (VOD) 150.10p 2.81%
Pearson (PSON) 944.60p 1.90%
NMC Health (NMC) 2,516.00p 1.86%
BT Group (BT.A) 195.54p 1.85%
3i Group (III) 1,131.00p 1.75%
AstraZeneca (AZN) 7,020.00p 1.67%
FTSE 100 - Fallers
Hiscox Limited (DI) (HSX) 1,736.00p -2.03%
Smith (DS) (SMDS) 371.51p -1.06%
Bunzl (BNZL) 2,148.00p -0.46%
Smurfit Kappa Group (SKG) 2,620.40p -0.44%
Sainsbury (J) (SBRY) 197.99p -0.41%
Burberry Group (BRBY) 2,287.00p -0.35%
Tesco (TSCO) 225.30p -0.31%
Prudential (PRU) 1,688.00p -0.27%
Whitbread (WTB) 4,542.00p -0.26%
HSBC Holdings (HSBA) 660.75p -0.25%
FTSE 250 - Risers
QinetiQ Group (QQ.) 305.40p 5.53%
TBC Bank Group (TBCG) 1,296.00p 4.35%
Future (FUTR) 1,134.00p 3.85%
Cranswick (CWK) 2,671.70p 3.71%
IP Group (IPO) 71.00p 2.90%
Amigo Holdings (AMGO) 165.00p 2.74%
Vivo Energy (VVO) 124.66p 2.52%
Jupiter Fund Management (JUP) 385.70p 2.42%
Energean Oil & Gas (ENOG) 1,040.00p 2.16%
PayPoint (PAY) 956.00p 2.03%
FTSE 250 - Fallers
Sanne Group (SNN) 537.00p -28.59%
Sports Direct International (SPD) 207.40p -9.75%
Entertainment One Limited (ETO) 438.40p -2.19%
Sabre Insurance Group (SBRE) 277.00p -1.95%
Clarkson (CKN) 2,574.00p -1.76%
Vesuvius (VSVS) 510.50p -1.54%
Fisher (James) & Sons (FSJ) 2,085.00p -1.42%
Funding Circle Holdings (FCH) 116.80p -1.35%
TI Fluid Systems (TIFS) 199.40p -1.29%
Hilton Food Group (HFG) 939.00p -1.26%